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HSBC builds a sustainable legacy across generations

Even in the best of times, succession planning can be a major challenge. Having worked hard to generate meaningful wealth, business leaders and wealth creators then have to navigate the nuances and real-world implications of transferring that success to the next generation. And now, amid the world’s ever-changing geopolitical structure and an ongoing global pandemic, it’s more critical than ever for Asia’s affluent to create firm family governance structures that not only protect and grow your portfolio, but allow successive members to contribute in creating a lasting, sustainable legacy.

Daunting though this may seem, achieving a smooth family succession plan can be made all the easier with an experienced wealth partner like HSBC Global Private Banking. With decades of experience as one of the region’s preeminent private banking specialists, its expertise and wealth management services have helped countless well-to-do clients traverse the often ambiguous and complex challenges of wealth transference and future planning. Leading the charge is Cynthia Lee, the Regional Head of Wealth Planning and Advisory, Asia, Global Private Banking at HSBC, who highlights some of the trials and best practices of setting up your family for future success…

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Setting up a proper family governance structure
There are often many disparate parts and unique circumstances that need to be taken into consideration when planning and implementing a firm strategy for family succession and wealth transfer. However, the first step is to actually embark on the journey itself. “I’ve been in this business for more than 27 years now, and it’s our day-to-day job. But I can totally understand that for our clients, it can be overwhelming and daunting because they’re being asked to lay out what should happen when they are no longer around, what should happen to their business, their grandchildren and so forth,” says Lee. “One of our biggest responsibilities is to ensure we’re able to break this out into actionable, digestible parts. Every family is unique, and we can help them prioritise by putting forth feasible, pragmatic solutions and highlight the advantages and disadvantages of each, so they can make the right decision.”

As family dynamics can change over time, constant review and revision of any existing plans are also hugely important. “In many cases, my clients have made plans in the past, but when we revisit them years later, they no longer hold up to the family’s needs and circumstances today,” she expands, “It’s worth checking back in with the plan you’ve made every three to five years to see if anything needs to be amended or included. You need to treat it as a live document, as planning is a life-long process.

Making decisions the right way
It’s no secret that without a proper succession planning, many affluent families lose their wealth within a few generations. To combat this challenge on the outset, Lee emphasises that open communication and a collective decision-making process is key. “Often, we are dealing with the wealth creator, the person who’s head of the family and in charge of making all the big decisions, and this case, setting up a structure is relatively straightforward,” she explains, “However, if you include the next generation, there are even more voices, and by the third, you could be dealing with a cousin consortium where family members actually come from different upbringings and backgrounds. That’s why it’s so critical to clearly define the roles and responsibilities of these individuals, to segregate various family interests, and highlight who are the best candidates occupy certain decision-making positions.”

“Given human nature, it’s only natural that there are situations where opinions vary. In these instances, implementing a collective decision-making process where everyone is aware of the rules of the game and how decisions ultimately get made is critical,” she continues, “There’s a lot of compromising that needs to happen, but they can test the system over time on small choices to larger ones. It can be anything from matters pertaining to business investments, charitable donations, or the inclusion of spouses to various forums the family may have. As long as there’s an accepted system in place and communication is facilitated, everyone can get their proper say.”

Building a sustainable legacy
“In addition to just growing and preserving family wealth, and creating a succession plan, clients also want to invest and deploy resources towards the environment and other sustainability initiatives,” says Lee. This marked shift from simply cutting cheques for sundry charitable causes to fostering very real, meaningful impact is a timely one, particularly in an age where the effects of global warming are being increasingly felt across the globe.

“Philanthropic advising is a targeted area of our holistic wealth planning services,” she adds, explaining that through HSBC Global Private Banking’s expansive expertise, affluent families can harness the power of wealth to drive long-term positive change. Be it through investing in environmental research, advancing clean energy initiatives or combatting social challenges, philanthropy has become an essential tool to help create a sustainable future not only for client’s families and businesses, but also for the wider world, and the future generations that will inherit it.


The information contained in this article has not been reviewed in the light of your individual circumstances and is for information purposes only. It does not purport to provide legal, taxation or other advice and should not be taken as such. No client or other reader should act or refrain from acting on the basis of the content of this article without seeking specific professional advice.

Issued by The Hongkong and Shanghai Banking Corporation Limited and HSBC Trustee (Hong Kong) Limited.

2021-11-08T15:58:17+00:00 November 08, 2021|Interview, Lifestyle|